BofA Targets 15% Drop in GHG, Funds $55M Program for Retrofits

BofA Targets 15% Drop in GHG, Funds $55M Program for Retrofits

Bank of America has raised the bar for its environmental performance with new goals to achieve a 15 percent reduction in greenhouse gas emissions from worldwide operations and attain LEED green building certification for 20 percent of its corporate real estate.

The goals were among the expanded environmental commitments announced by the firm in the past two weeks. On Wednesday, Bank of America said it will provide $55 million in low-cost loans and grants to community lenders in a competitive program that's designed to encourage energy efficiency retrofits in older buildings.

The new GHG target follows one that BofA set and exceeded for reducing its carbon footprint. The firm was aiming for a 9 percent absolute reduction in GHG emissions from legacy BofA operations in the U.S. by 2009, compared to a 2004 baseline. BofA slashed emissions by 18 percent, as the company noted in its most recent report to the Carbon Disclosure Project.

The goal for a 15 percent cut in GHG emissions by 2015 also calls for an absolute reduction, but uses a 2010 baseline and factors in international properties as well as legacy operations for Countrywide and Merrill Lynch, which the company acquired in 2008 and 2009, respectively. Taking those additions into account, the new goal represents a global reduction of 30 percent in aggregate GHG emissions, compared to 2004, according to BofA.

Energy use accounts for 90 percent of BofA's GHG emissions, the company said, and making buildings and their operations more energy efficient is a key strategy for reducing consumption and emissions. The commitment to bring 20 percent of the firm's corporate real estate portfolio under LEED certification builds on the BofA's efforts to green its facilities.

About 11 percent, some 13.2 million square feet, of BofA's corporate workspace is certified under the U.S. Green Building Council's Leadership in Energy and Environmental Design standards. Last year, the 55-story, 2.1 million-square-foot Bank of America Tower in New York City received platinum-level certification -- the highest possible -- under the LEED standard for core and shell, called LEED-CS.

BofA's $55 million program in support of community development building retrofits is the latest addition to the company's list of broader efforts to promote sustainability.

Buildings account for about 40 percent of energy consumption in the United States. The Obama Administration, the USGBC, the Clinton Climate Initiative and several other NGOs and industry groups are pushing for building retrofits to reduce energy consumption, save money, improve energy security and address climate change.

Under BofA's new program, as many as a dozen community development financial institutions will be selected to receive low-cost, long-term loans or grants. Known as CDFIs, the institutions provide credit and financial services to underserved markets to help rebuild distressed or neglected communities.

BofA is seeking out the CDFIs that specialize in financing energy efficiency improvements and have developed the strongest programs with scale-up potential. Ideally, the programs would cover upfront investment costs for energy efficiency retrofits and enable building owners to make the improvements, then pay back the loans with savings realized from the projects.

"Through this program, Bank of America will fund the community lenders that have developed creative and effective approaches to financing energy efficient retrofits, with the aim of bringing these innovative financing structures to scale for greatest impact in reducing U.S. carbon emissions," said Anne Finucane, BofA's Global Strategy and Marketing officer, in a statement.

Of the $55 million sum, $50 million is earmarked for loans to CDFIs and $5 million will be awarded as grants to help the CDFIs pay for training, marketing and other costs related their retrofit financing programs.

BofA plans to work with the CDFIs to collect pre- and post-retrofit information from the property owners who receive loans. The data will be used to assess the program's effects on energy and water consumption and measure other outcomes, such as cost savings. Rick Fedrizzi, USGBC president, CEO and founding chair, praised BofA for creating a comprehensive program. "The fact that Bank of America is not only launching this program, but gathering data and reporting on the conclusions will help enhance the effectiveness of the existing building sector," Fedrizzi said.

"At the very core of what financial institutions do -- lend, invest and create market activity -- lies the power to mobilize intellectual and financial capital to commercialize and implement renewable and low-carbon energy and promote energy efficiency," Finucane said in a GreenBiz post last fall, "What Banks Can Do to Foster a Low-Carbon Future."

In 2007, BofA launched 10-year, $20 billion global business initiative on climate change. In the four years since, the company has delivered $12.1 billion in loans, investments, capital markets activity, philanthropy and in-house operations improvements that are intended to ease environmental impacts affecting climate change.

Image of the Bank of America Tower CC licensed by Jleon on Wikimedia Commons.